On April 4, 2017, the Seventh Circuit issued a decision with employment law implications. In an en banc decision, Hively v. Ivy Tech Community College, the court held that the protections of Title VII of the Civil Rights Act of 1964 (Title VII) that prohibit discrimination in employment on the basis of sex, necessarily also prohibit employment discrimination on the basis of sexual orientation.

This decision will have far-reaching impact on workplaces within the jurisdiction of the Seventh Circuit. Employers everywhere should immediately consider whether to modify any policies, procedures or training to protect against future liabilities.

Background to Hively

Starting in 2000, Kimberly Hively, a lesbian, taught as a part-time adjunct professor at Ivy Tech Community College in South Bend, Indiana. Between 2009 and 2014, she applied for six full-time positions. Ivy Tech denied each application. In July 2014, Ivy Tech declined to renew her part-time contract.

Hively filed a charge of discrimination with the U.S. Equal Employment Opportunity Commission. In her charge, she alleged Ivy Tech discriminated against her on the basis of her sexual orientation in violation of Title VII. Exhausting her administrative remedies, and filing pro se, Hively then sued Ivy Tech in federal court. Ivy Tech moved to dismiss Hively’s complaint, arguing that sexual orientation discrimination is not a cognizable claim under Title VII.

The district court granted Ivy Tech’s motion and dismissed Hively’s complaint. Hively appealed and a split panel of the Seventh Circuit affirmed the district court’s ruling. The Seventh Circuit then granted a rehearing en banc – leading to the April 4, 2017 decision.

The Seventh Circuit’s Decision

As an initial matter, the Seventh Circuit acknowledged an obvious truth – the express text of Title VII plainly does not protect employees on the basis of their sexual orientation. Nevertheless, the court held sexual orientation discrimination is a form of sex discrimination and therefore is a cognizable claim under Title VII. The court came to this conclusion under three separate theories.

First, the court performed a comparative analysis. It reasoned that if Hively had not been a woman but instead “had been a man married to a woman … and everything else had been the same … Ivy Tech would not have [allegedly] refused to promoted her and would not have [allegedly] fired her.” This, the court noted, “describes paradigmatic sex discrimination” in that “Ivy Tech is disadvantaging her because she is a woman.” (emphasis in original). Therefore, the court held that Title VII protects sexual orientation.

Second, the Seventh Circuit held that sexual orientation discrimination is impermissible associational discrimination. That is, Ivy Tech allegedly discriminated against Hively because of the individuals with whom she associates. In making this argument, the plaintiff analogized to the U.S. Supreme Court case of Loving v. Virginia, which struck down anti-miscegenation laws. In citing Loving, the Seventh Circuit noted that “both parties to [an] interracial marriage [are] . . . denied important rights . . . on the basis of their race,” which is impermissible under the Fourteenth Amendment. The Loving Court reached this conclusion because merely changing the race of one person in the marriage would change whether the marriage was permissible under the law—i.e., it is inherently a race-based distinction. The Seventh Circuit applied this reasoning to Hively, stating that “[i]f we were to change the sex of one partner in a lesbian relationship, the outcome would be different . . . reveal[ing] that the discrimination rests on distinctions drawn according to sex.” Thus, the Seventh Circuit noted that Title VII protects sexual orientation under an associational discrimination theory.

Third, the Seventh Circuit held that sexual orientation discrimination in employment falls within existing protections under Title VII’s sex stereotyping theory. In 1989, in dicta, in Price Waterhouse v. Hopkins, a plurality of the U.S. Supreme Court noted that sex stereotyping in the workplace could constitute impermissible sex discrimination under Title VII. The Seventh Circuit held that Hively’s situation represented “the ultimate case of failure to conform to the female stereotype (at least as understood in a place such as modern America, which views heterosexuality as the norm and other forms of sexuality as exceptional): she is not heterosexual.” The Seventh Circuit wrote that Hively’s case was thus indistinguishable from other sexual stereotyping claims brought by female plaintiffs “rejected from jobs in traditionally male workplaces, such as fire departments, construction, and policing.” The reason for this conclusion is that employers are not permitted to “polic[e] the boundaries of what jobs or behaviors they f[in]d acceptable” by an employee on the basis of the employee’s sex. Therefore, the Seventh Circuit held that Title VII protects sexual orientation discrimination under a sex stereotyping theory.

The Seventh Circuit rejected the textual argument that sexual orientation’s omission from Title VII’s express text was dispositive. In doing so, the court noted that several theories of legal liability of Title VII law as we understand them today, such as sexual harassment, are not expressly mentioned in the text. Nevertheless, because they involve discrimination “because of … sex,” such claims are viable. So too, the Seventh Circuit noted, is sexual orientation discrimination. In doing so, the court recognized the recent trend of Supreme Court jurisprudence expanding Constitutional rights to lesbians, gays, and bisexuals in such cases as Lawrence v. Texas (invalidating state laws criminalizing consensual same-sex sexual relations), United States v. Windsor (invalidating the Defense of Marriage Act) and Obergefell v. Hodges (recognizing national constitutional right to same-sex marriage).

For these reasons, the Seventh Circuit concluded that as a matter of “common-sense reality … it is actually impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex” in violation of Title VII.

What Does This Mean for Employers?

Employers that have employees within the Seventh Circuit – which is composed of Illinois, Indiana, and Wisconsin – should be advised that this decision is binding precedent. Employers in these jurisdictions should review their policies, procedures, and training regimens immediately to ensure that lesbian, gay, and bisexual employees and applicants are not subject to adverse employment actions on the basis of their sexual orientation.

However, employers who are entirely outside of the Seventh Circuit are not “off the hook.” These employers should be aware that courts may rely on Hively’s reasoning to create new law in their jurisdictions. As such, employers outside the Seventh Circuit may want to consider taking similar steps if for no other purpose than to avoid or minimize future litigation.

Finally, employers should be aware that, in the near future, the U.S. Supreme Court is likely to consider whether sexual orientation discrimination is cognizable under Title VII. Hively created a circuit split as the First, Second, Third, Sixth, Eighth, Ninth, Tenth and Eleventh Circuits have all held that sexual orientation discrimination claims are not cognizable under Title VII. Until the Supreme Court resolves the issue, employers will face a significant degree of uncertainty. However, there is no uncertainty that discrimination on the basis of sexual orientation is prohibited in states, cities and other local jurisdictions that have explicitly by statute or ordinance prohibited discrimination in employment on the basis of sexual orientation.

The bottom line: this is a rapidly developing area of law that has many pitfalls for employers who may not be aware of shifting legal obligations. Employers should evaluate their workplaces to assess if they may be at risk of litigation.